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Don't Mess With Fannie

Updated Nov. 25, 2003 12:01 a.m. ET

It was a promising start. We mean the attempt to bring some serious oversight to Fannie Mae and Freddie Mac, the two mortgage-finance giants. The stars were in unusually favorable alignment: The companies have been guilty of financial hanky-panky or accounting errors, and the White House, Treasury and powerful Members of Congress want something done. Yet everyone agrees the effort is dead for this year.

What happened? Simple, really. Fannie and Freddie deployed their famously powerful lobbying machine all over Capitol...